Aggreko takeover talk drives Footsie

Published on Thursday 2 September 2010 23:07

LONDON FTSE 100 CLOSE 5,428.15 +57.11

AGGREKO finished at the top of the FTSE-100 risers board last night after rumours swirled of a possible takeover approach for the Glasgow-based temporary power supplier.

In a quiet day for corporate news, merger and acquisition chatter kept traders busy.

Aggreko closed up 5.5 per cent or 79p at 1,515p, while Cable & Wireless Worldwide, which has also been at the centre of bid speculation, closed up 3.15p or 4.5 per cent at 72.95p.

But one market watcher poured cold water over the Aggreko chatter. He said: "The takeover rumour sounds balderdash to me. The shares have had a great run due to three company upgrades on its earnings outlook so far this year.

"The shares were trading at just 10 at the start of the year."

The benchmark FTSE-100 index hit a near four-month closing high after a better-than-expected jobs report from the United States eased concerns that the world's largest economy was slipping back to another recession. The closely-watched US non-farm payrolls were expected to show more than 100,000 jobs lost over the month, but the figure was far lower than expected at 54,000.

But a weaker August reading of the US services activity index limited the gains on the Footsie, which closed 57.11 points or 1.1 per cent higher at 5,428.15, up for the sixth straight session.

Phil McHugh, senior executive dealer at Currencies Direct, said: "The US payroll figures will help boost short term confidence in the nation's economy.

"One swallow does not make a summer, but the figures should quieten those predicting a double dip, at least for now."

The Dow Jones Industrial Average on Wall Street pared back some of its earlier gains after weak economic data was released on the US services sector.

Economic figures in the UK were also a disappointment, showing a slowdown in growth among services firms - such as shops and hotels - and a sudden slump in construction orders.

The pound largely held firm despite UK recovery fears, up fractionally against the dollar at $1.54, while it remained unchanged at €1.20.

The only major blue-chip to offer any news was oil giant BP, which said the costs of the Gulf of Mexico oil spill had risen to 5.2 billion so far. Shares rose 9.1p to 401.7p.

Home Retail Group, the Argos and Homebase owner in line for demotion from the FTSE 100 next week, was among the fallers, sliding 0.5p to 221.3p.

In the FTSE 250, troubled social housing firm Connaught was off 2.5p or 13 per cent at 16.5p as worries over a potential debt-for-equity swap continued to hit the stock.Connaught - whose shares have been devastated by a succession of profit warnings - is set to be relegated to the ranks of the small-caps.

The firm was followed lower by oil explorer Soco International, which slid 40p or 8 per cent to 436.6p after a drilling disappointment in the Congo.

Spread betting firm IG Group was also on the back foot after brokers at UBS cut their rating to "neutral", sending shares down 12p to 511p.

But DSG International, which owns Currys and PC World, ticked 1.1p ahead to 26.3p as Numis analysts raised full-year profit forecasts.